Federal Judge Poised to Punish Innocent Vietnamese for Somebody Else's Crime
For Hung Ngo, history repeats itself?
With more than $700,000 at stake, Vietnam War refugee Hung Ngo this month entered a courtroom inside the Ronald Reagan Federal Courthouse breathing heavily and looking confused. Three corporate lawyers and a Department of Justice attorney faced U.S. District Court Judge James V. Selna while discussing mind-numbing intricacies of a legal quarrel over scrapped plans for a thermal-waste plant on a California military base. Ngo sat down, sighed, scanned the plush room and waited for the session to end so he could show Selna's clerk his summons in a separate matter.
"Yeah, that case finished about 30 minutes ago," the woman said before handing the document back without asking a single question and ushering the 60-year-old Ngo, an X-ray technician, out of the courtroom as he tried to explain his situation. "You have to leave."
In the hallway, he turned to the only person who wanted to know his story: me. I'd been watching Canon Inc. USA v. Thuy Le for more than a year and attended court on April 3, hoping to interview the elusive Le about the Twilight Zone-type litigation. Trademark-infringement cases aren't normally fascinating, but this dispute has more snake twists and turns than a Louisiana river.
The drama began quietly in 2015, when Canon officials discovered that somebody at a business address on Westminster Boulevard in Little Saigon as well as at a Mission Viejo residence was using eBay to illegally sell thousands of counterfeit digital batteries for cameras and camcorders. Investigators tied Le, an international nail-salon mogul with 225 shops, to both properties. They also learned an email account used in the scam belonged to co-defendant Than P. Nguyen and traced him to the Mission Viejo house. Because cease-and-desist letters weren't productive, the company's lawyers—J. Andrew Coombs, Annie S. Wang and Mark Schonfeld—filed a lawsuit to enforce the valuable trademarks and demonstrate that violators will be aggressively pursued.
But a problem emerged from the outset. Repeated attempts to reach Le by mail failed. Plus, nobody could physically locate him to deliver a summons. Process servers left notices at the Little Saigon office with a "Le Enterprises" emblem on the door and took undercover surveillance photographs proving their efforts. During one of three visits to the Mission Viejo house, a woman claiming to be a foreign visitor reported that Le was overseas with an unknown return date.
In February 2016, Selna determined that Canon had met the standard for having served adequate notice and, because the defendants failed to appear at any hearing or file opposition briefs, handed the company a default judgment. "The public interest is served by upholding Canon's intellectual-property rights because consumers will no longer be confused into believing they had purchased genuine Canon batteries when, in fact, they had purchased counterfeits," he ruled. "This is particularly the case where the public is affirmatively and incorrectly told that the defendants are selling 'genuine' batteries. . . . The court finds that the use of the counterfeit trademark was willful."
Though Canon sought $400,000 in damages, Selna believed the "fair" amount was $240,000. The company filed a December 2016 notice to collect that sum against Le by having the Orange County Sheriff's Department sell his Fountain Valley house on Daisy Avenue at public auction. A month later, Selna issued an order asking if anyone objected to Canon's request.
Le finally appeared through a Lake Forest-based attorney, Andrew D. Weiss. On the same day of the judge's default judgement ruling, Weiss filed a brief seeking to set aside the default because his client had not been properly served at his "usual place of business," which is a home office in Las Vegas. According to this lawyer's account, Le—who has never sold any product on the internet and had nothing to with the counterfeit batteries—knew of the Canon litigation and had confronted Nguyen, his wife's cousin. Nguyen used the Westminster Boulevard and Mission Viejo addresses to conduct his own affairs. Weiss explained to the judge the reason his client had largely ignored the case: In August 2015, Nguyen assured Le he'd met with Canon's lawyers and resolved the lawsuit.
Hang on for the next turn: After Canon won the case, Le gave his Fountain Valley real estate to a woman, My Thi Nguyen, as a gift, and she put the property—a 1,782-square-foot, three-bedroom house worth $713,000—on the open market. In June 2016, Ngo, his wife and another Vietnamese couple bought the remodeled home with a pool, investing $400,000 of their life's savings upfront and obtaining a mortgage for the remainder.
But in November 2016—five months after their purchase—Federal Express delivered a shock in the form of a three-page letter from Coombs. The Canon attorney advised them of the pending confiscation of their house, even though they don't know Le and didn't have any involvement in the battery scam. "The transfers of the property to My Thi Nguyen, and then to [you] do not affect the validity of Canon's lien," Coombs wrote.
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At the April 3 hearing, Kevin S. Sinclair—an attorney for Nationstar Mortgage LLC, the lienholder on Ngo's house—protested the sale. Sinclair told Selna the situation was "weird" because an auction wouldn't punish the defendants in the trademark-infringement case, but rather his clients and the current owners of the house. "It's quite an unusual situation," Sinclair said. (We asked Coombs why Canon didn't go after Le's actual Orange County residence, the Misiion Viejo house, rather than Ngo's Fountain Valley property, but he didn't respond.)
Selna, who'd issued a tentative ruling for Canon's right to sell the house, wasn't sympathetic. "It's a collection case at this point," he declared. He even questioned the legal ability of the mortgage company to intervene in the lawsuit given they were "not a party to the underlying dispute."
For his part, Weiss insisted Le was innocent, too. "His wife's third cousin, Than Nguyen, caused all of this. Le thought Than addressed [Canon's complaint]. He didn't, and that was his mistake. . . . Canon has no evidence he was ever involved [in the scam]."
The judge said he would reconsider his stance based on Sinclair's arguments. Minutes into the next case, Ngo walked in. He was late after accidentally going to Orange County Superior Court and wandering around before realizing his error; he then had to scurry several long blocks to Selna's courtroom. Ngo had intended to beg the judge to hold the cheaters accountable, not him.
"How can they sell my house?" Ngo asked me in the hallway. "I had nothing to do with that case. When I bought it, nobody—not the bank, not the escrow company, not the title company, not the mortgage company, not the realtor—told me somebody could one day come and do this to me."
The native of central Vietnam, who at the age of 24 in 1981 fled Hanoi's communist regime on an overcrowded boat, paused for 15 seconds to ponder his next statement. A worried look appeared on his face. "If they take my house [under these circumstances]," he said, "that means nobody is ever safe."